ML20249A950

Supplemental Petition of Great Bay Power Corp for Determination of Reasonable Assurance of Decommissioning Funding

ML20249A950
Person / Time
Site:	Seabrook
Issue date:	06/12/1998
From:	Charnoff G External (Affiliation Not Assigned), SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	NRC
Shared Package
ML20249A947	List: ML20249A946 ML20249A950
References
NUDOCS 9806190179
Download: ML20249A950 (9)

Text

.

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION in the Matter of )

)

North Atlantic Energy Service Corporation and )

Great Bay Power Corporation ) Docket No. 50443

) (License No. NPF-86)

(Seabrook Station, Unit No.1) )

)

SUPPLEMENTAL PETITION OF GREAT BAY POWER CORPORATION FOR A DETERMINATION OF REASONABLE ASSURANCE OF DECOMMISSIONING FUNDING On January 30,1998, Great Bay Power Corporation (" Great Bay") petitioned the Nuclear Regulatory Commission ("NRC") to determine that a proposed acceleration of payments by Great Bay to the decommissioning trust fund for Seabrook Station Unit I would provide

" reasonable assurance" within the meaning of the NRC's regulations that funds would be available for the decommissioning of Great Bay's pro rata share of the Seabrook facility, in the alternative, Great Bay requested a permanent exemption under 10 C.F.R. { 50.12 in reliance on Great Bay's proposed acceleration ofits decommissioning trust fund payments.

Since the filing of this petition, the State of New IIampshire has enacted legislation, Senate Bill ("SB") 140, which would make the otherjoint owners of the Seabrook facility guarantors of Great Bay's decommissioning obligation in the event Great Bay were to default on l its obligations. Sss SB 140 { 2. (A copy of Senate Bill 140 is attached.) The amounts paid by the otherjoint owners as such guarantors would be recoverable in the rates charged to their customers, subject to rate commission determination that such charges were just and reasonable L

and in the public good.' Great Bay submits that the guarantee mandated by Senate Bill 140 l

9906190179 990615 PDR ADOCK 05000443 P PM ,

L .

t l; -

p ,-

clearly provides reasonable assurance of decommissioning funding for its 12.1% ownership interest In the S'eabrook facility in accordance with NRC regulations, as set out in 10 C.F.R. 6 -

50.75(e)(2), which provides that " acceptable methods of providing financial assurance for decommissioning are . . . "[a] surety method, insurance, or ethst guarantee method." (emphasis -

! added).

Description of Senate Bill 140 and its Guarantee of Great Bav's Decommissioning Funding Senate Bill 140 was signed into law by the Govemor of New Hampshire on June 11, L

1998. It passed the New Hampshire House on April 23,1998 and the Senate on May 21,1998.

Section 2 of Senate Bill 140 sets forth the provisions by which the otherjoint owners of 1

the Seabrook facility are the guarantors of Great Bay's Seabrook decommissioning obligations.

Specifically, Section 2 of Senate Bill 140 applies to facilities as defined in RSA 162-F:14, III which defines " facility" as "any nuclear generating facility subject to decommissioning" pursuant to Chapter 162-F of the RSA.1' As a nuclear facility subject to federal and state decommissioning requirements, the Seabrook facility is subject to the decommissioning requirements set forth in Chapter 162-F of the RSA. Sss RSA 162-F:1; 162-F:19. It is therefore I a facility as defined in RSA 162-F:14, III and to which Senate Bill 140 applies. i l

Section 2 of Senate Bill 140 provides that the " joint owners of a facility [as defined in RSA 162-F:14,111] shall be proportional guarantors of the decommissioning obligations ofmy ]

i .

E . Chapter 162-F establishes the New Hampshire Nuclear Decommissioning Finance Committee which, as described in Great Bay's January 1998 Petition, has responsibility to determine (1) the amount of the decommissioning fund to be established for the Seabrook facility, and (2) the amount of the regular monthly -

payments to be paid into the decommissioning fund by each of the Seabrook owners in order to reach the level of E decommissioning funding determined to be necessary by the Committee. Sg RSA 162-F:17, I; 162-F:19, II;

' 162-F:21. II; 162-F 22,1. Chapter 162 F requires the amount of the decommissioning fund to be " sufficient to -

cover all costs of decommissioning the facility" and to achieve and maintain "the level of decommissioning required" by the NRC. RSA 162-F:21. II.

i

___ ___x__:__=____________ _

I l ..

joint owners aflhe facility without a franchise territory." SB 140 { 2, II (emphasis added). A

^

" joint oh of the facility without a franchise territory" is defined by Senate Bill 140 to mean an owner of a facility, as defined in RSA 162-F:14, III, which does not have, either directly or indirectly through a subsidiary, affiliate, or contractual relationship, a retail electricity distribution franchise territory from which to collect decommissioning costs, on the effective date of this section.

X at I. The' effective date of Section 2 of Senate Bill 140 is the date ofits " passage" or June 11, 1998 when it was signed into law by the govemor. Sgg SB 140 f 5.

l L

Great Bay does not have -- and did not have on June 11,1998 when Section 2 of Senate l

Bill 140 became effective -- a retail electric distribution franchise territory, either directly or l:

I indirectly, from which to collect decommissioning costs for its ownership share of the Seabrook facility. Accordingly, under Section 2 of Senate Bill 140, the otherjoint owners of the Seabrook facility are "the proportional guarantors" of Great Bay's decommissioning obligations with

. tespect to the Seabrook facility.E Section 2 of Senate Bill 140 provides that "[i]f a joint owner of a facility without a franchise territory," such as Great Bay, " defaults on its decommissioning obligations," the New Hampshire Nuclear Decommissioning Financing Committee "shall require

- the remaining owners of the facility to submit for the committee's approval a plan for the fulfillment af the defaulting gwner's decommissioning obligations." SB 140 6 2, IV (emphasis

- added). For purposes of Senate Bill 140, a default is defined as "the failure by an owner to make 2 consecutive payments to the [Seabrook decommissioning] fund required by RSA 162-F".16 E L Senate Bill 140 provides further that the joint owners are also the " proportional guarantors of anyjoint owners of the facility that are unable to meet their obligations as proportional guarantors for the decommissioning obligations of anyjoint owner of the facility without a franchise territory." SB 140 l 2,111.

E ~As noted previously, under RSA 162-F the New Hampshire Nuclear Decommissioning Finance Committee is to Footnote continued on next page

r Thus, under Senate Bill 140, the otherjoint owners of the Seabrook facility are guarantors of Great Bay's obligation'to make monthly payments to the Seabrook decommissioning fund in the event Great Bay defaults on its obligation. The otherjoint owners all have retail electricity distribution franchise territories from which to collect decommissioning costs.- Senate Bill 140 specifically authorizes the inclusion in rates charged to the customers of ajoint owner of any amount that it pays as a guarantor subject to " approval by the public utilities commission after a finding that such a charge isjust and reasonable and in the public good." SB 140 6 2, VI. E The requirement for charges to be just and reasonable is the traditional cost-of-service rate-making

- standard applied by utility commissions for including costs in the rate base of an electric utility.

The Commission's different treatment of electric utility licensees under its financial qualifications and decommissioning funding regulations is based on the detennination that the 1

I rate-making process assures that the necessary funds for safe operation, et decommissioning, of .

e nuclear plants will be made available to electric utilities. Sag, g&,49 Fed Reg. 35,747,35,750 (1984).

Footnote continued from previous page

" establish a regular monthly schedule for payment of monics into the [Seabrook decommissioning] fund" by each of

' the Seabrook owners "necessary to reach the specified amount needed for decommissioning as determined by the ,

committee." Sg RSA 162-F:19,11. Further, Great Bay has agreed with the other co-owners to make accelerated payments to the Seatwook decommissioning fund (as proposed in its January 1998 Petition) such that Great Bay will have contributed sufficient funds by the year 2015 to allow sufficient monies to accumulate - with no further payments by Great Bay to the fund - to the full estimated amount of Great Bay's decommissioning obligation by the time the current Seabrook operating heense expires m October 2026. j

. . . I E- Senate Bill 140 thus expressly provides a legislative mechanism for the Ncw Hampshire co-owners to recover

~

l through rates any amounts paid as a guarantor of Great Bay's decommissioning obligations. The non-New - l Hampshire co-owners would likewise presumably be able to recover any amounts paid as guarantors through their l'

, , f rate commissions, which, as a practical matter, would be hard pressed to deny such recovery were the New Hampshire commission to conclude that such costs incurred by the New Hampshire co-owners 'were "just and i reasonable and in the public good." Moreover, under Senate Bill 140, the New Hampshire co-owners (and any .

other non-defaulting co-owner) would be proportional guarantors of the respective guarantees of the non-New Hampshire co-owners to the extent the latter were to default on their guarantee obligations. En note 2, suga.

.4 ;i L ,

i

, 1l . ~  :

Thus, Great Bay's decommissioning obligation to make monthly payments to the Seabrook decommissioning fund for its 12.1% ownership interest in the Seabrook facility will be guaranteed by the otherjoint owners authorized to recover such costs under a cost-of-service rate-making process. As such, Great Bay believes that this guarantee arrangement satisfies the requirements of 10 C.F.R. Q 50.75(e)(2) which provides that a non-electric utility licensee may, among other acceptable methods, provide " financial assurance for decommissioning" by "[a]

surety method, insurance, or qthtI guarantee method." 10 C.F.R. f 50.75(e)(2)(iii)(emphasis added).E The Commission has described the function of these methods for providing reasonable assurance of decommissioning funding as follows:

The surety bond, credit methods and other guarantee methods assures that decommissioning sosig vdll hs Daid should the licensee default. ,

l 50 Fed. Reg. 5,600,5,607 (1985) (Statement of Considerations to Proposed Rule on "Decommis-sioning Criteria for Nuclear Facilities")(emphasis added). That is the precisely the function served by Senate Bill 140 here. It provides a guarantee - supported by the same rate-making  ;

process that guarantees the decommissioning obligations of the other Seabrook co-owners -- that Great Bay's share of Seabrook's decommissioning costs _will ht Daid in the event of a default on its obligation to make monthly payments to the Seabrook decommissioning fund.

Moreover, Great Bay is making payments to an external sinking fund in the same manner l

as the other Seabrook co-owners. Great Bay's making of payments to an external sinking fund l coupled with Senate Bill 140's provision ofrate-making based guarantees for the amount yet to L

-l 1 'Ihe NRC's proposed rules on " Financial Assurance Requirements for Decommissioning Nuclear Power Reactors" did not propose any changes to the requirements of 10 C.F.R. I 50.75(e)(2). Sgg 62 Fed Reg. 47,588 l L (1997).- 4 .

k p, -

H L ,

\' l f l- - - - - - -

be funded places Great Bay in a position analogous to that of the other Seabrook co-owners. No more should be' required to show reasonable assurance of Great Bay's decommissioning funding ofits 12.1% ownership share of the Seabrook facility.

Accordingly, the Commission should determine that the guarantee mandated by Senate Bill 140 provides " reasonable assurance" in accordance with the NRC's regulations that funds will be available for decommissioning Great Bay's ownership share of the Seabrook plant and satisfies the provisions of 10 C.F.R. Q 50.75(e)(2).

Respectfully submitted, GREAT BAY POWER CORPORATION By: b Gerald Charnoff 84M.4 Shaw, Pittman, Potts & Trowbridge 2300 N Street, N.W.

Washington, D.C. 20037 i (202) 663-8032 l J

June 12,1998

$99295-OS / DOCSDCl l

l

48 .* . 'SNWeb.'O ?hb'5 "' v'/;: Mk.'W 9- .N.%f ~'.... * ' ' d^. ~ ' ' "

W UjNiB ' " -

p  ??:l':.i.)g ' . ; ' % ' kn;. " -

m q.- - '1 M :n::% " ' , M 't- -

. . . . ..x, '..M...

. ;9; ., . . , , . . , .

CHAPTER 164 SB 140 - FINAL VERSION 2/12/DH 070%

23 april 08.. 1421h -

6/4/98, IU40e,bn 07 1067 03/02 STATE 01: NEW HAMPSillitE In the Year of Om Lord Our 71weaund Nbse Hwuired and Ninety-Sight A N A l'T relative to the obligations of joint owners to the nuclear decommissioning finnneing fund und rebitive su the membership of the nuclent deco nmissioning Gnuncing commit.tme.

Beit nocted by the Smote <m.d Hmue of Representatives in General Court convened:

1 I:14:1 l'ublic Safnty and Wnifare; Decommicioning of Nuclear Electric Cnneraring Facilities; 2 Cornmitten Establinhad; l'.ompmition. Amend 1(SA 162 F:15. Il to read as follows:

3 11.1.'och committno ahnll conmixt of one perxon who is n rexidant of the town or city in which 4 the facdity in to be located und who shall be appointed by tho selectrnen of the town or the mayor 5 and council of the city, the chairman of thn public utihtinx commin; ion. k=c er. , ^.; ; ;

6 =::% d t: Ig "- ".=? =-fr.:~l 2 senators, at least one of whom shall be a member 1 of the executine departments and administration committee, or its successor, and one of 8 whom skull be familiar with fiscal issues, to be appointed by the scnut.c prcxident. V .; %=

g =.a ; a. S_ 7 e u. gu ry e . . b':=l 2 house members, at lear 2 one of 10 whom shall be a member of the science, technology, and energy committee, or its successor, lI arid one of whom shall be familiar with fiscal issues, to be nypointed by the spcnker of the 12 hounu the xtato trenxurnr or dexignee. the commixxioner of the department of healt.h and human 13 acrvices or designne, ihn commissioner of tho department of safety or designee ent! [a u p.e r - < rd'a mp , ' ,gr P in ' = r  ;;- - m c' .'--Puy) the I$ director of the gooernor's office of energy and community services or designee.

16 104:2 I)ccommimioning of Nuclear Einctric Generating I?acilities: Guarantee of Payment; 17 Defnuit of Payrnent ~

JK 1. As used in thix net. " joint ownnr of the theility withoul a franchise territory" rneans an 19 owner uf u facility. nx delined in IGA 102 IS li. Ill, which doen not hnve, either directly or indirectly

. 20 through n subxiv.iary, affilinte or contractuni relationship, a retad electricity distribution franchise 2L territory from which to collect decommi.uioning comix, on thn clinctive dato of this section. -

22 II, The joint ownern of n facility shall be proportionnt guaraniors of the decommissioning 23 obligations of uny joint owner of the fucility without n franchine territory.

24 111. The nuclent decommissioning finnneing commiti.ne shall dexignato thejoint owners of a 25- facilily m propori.ionni guarantors of any joint ownern of the f.icility that nre unable to meet their 26 obligation = as proportional gunrrmtor if ihn decommiwinning obligations of any joint owner of the l

l i: M . , ~ - -

.v;.:.~-;.v- - -

.M:A . . ..

MW & &

%~

~

..:-k&. d:. %

W Y' , :Q.:- % $ 4} N O y.:::ha.469.):y+

0.l ;;9? .: ::Q;i. $%* ::GN.??.9F:.M; "

3.l#*

.~ *h UN "iSi~:^* *M Q'.;. *

• f a g lm.+ y; m.%g w...y  ? _^

,m_

CHAPTER 164 SB 140 - FINAL VERSION '

- Page 2 -

I facility withoul- a franchise territory.

2- I V. If n joint owner of the _ facility without a fran' chi >e territory defaults on its 3 decommissioning obligations t.he committon shall require the remaining owners of the facility to 4

submit for the committee's approval a plan for the fulfillment of the defaulting owner's-5 decommincioning obligations. The plan wholl be submitted within 30 dnys after the default.. The 6 plan may include the snie of the defaulting ownh.r's share ofI.he power generated by the facility, and 7 the application of the proceeds of such anin in I.hn dernulting owner's decommissioning obligations.

8 f': purposes of this section. " default" mennw the failure by an owner to make 2 consecutive 9 payments to t.he fund required by RSA IGz F.

10 V. If there is no pinn submitted and approved pursuant to paragraph 111, the committee

!! may preparn and implement a plan for rocovering the elecommissioning coste in default.

12 VI. Notwithstanding any niher provision of Inw. n utility that is rnquired to pay a 13 proport.ional sharo as guarantor pursunut in this section may charge ull or some of the amount to

-14 cui>tomers on a per kilownti hour bnxis only upon approval by 1.hn public utilities commission after a 15 finding that Huch a chnrge injust nnd reasonable und in the public good, ld Vll. Any obhgation incurrmi by un owner us u guarnnfor pursuant tu this section shall be j 17 enforceabin under the provisions of R.9A IG2.F.

1M 1(i4::1 Hopnal. Section 2 of I.his net, rnlative to decommissioning of nuclear electric generat.ing 19 fucilities, in repenlod.

20 IG4:4 Contingency, Section 3 of this act shnll I.nke elTect 30 days after the ehnirman of the 21 nuclear decommissioning financing committec hus certified Di the ' secretary of state that 22 comprehensive funding assurance for decommixxioning hnx boon implemented.

23 IG4:5 Elroctive Dato.

24 1, Section 3 of this nel shall tako effnci nx provided in section 4.

25 il, The remainder of this act nhall I.nkn effect upon it.s passagn.

26 27 (Approved: June 11.199N) 2N (Effective Date: L Section .1 shall take effect as provided in section 4.

2V

11. The ra:mainder shall take effect June 11.1998.)

30 3I 4g i

J v., +. *

• '.~:.2.:'.:.>.:

e . 9:'.?: p*r ~c. c.: -  :! - ..

• _ mx .s. .:- k,.M::: m. . *L,

. .:; ~-;i A,.. -~

• • '.. . q, . +

- *. * * *b:. *

'-,, .. i

• . C.

h*j.u: .:;;:i(b . -. .:::+.v i::.% 2:i -

i% =-i : . .. * :' - w - *:4.; %?r: ~ ~~ *

• M "^

• i:M * '". .':,

e. , .. . ,;. . -:.. . i: .:;.: q,..,..... _=< w - j.y ~ _. ._ ~ ~ ' - " .

i:

h Senate Bill No.140 .

A'nAct r'etative to the obligations ofjoint owners to the nuclear decommissioning financing fund and relative to the membership of the nuclear decommissioning financing committee.

A 8- $mnw a Senagenrolled Bills Committee Memb '

l l&-_

House Enrolled Biffs Committee M~ ember i

M Speaker of the Kou's/>f Representatives A&$- , ^r P dent o[the senate '

%e 46vernor

I Approved:>Qll gg Enedin Date { ,}c ,3 94gg g a p vgL 4 gg,,,q, 1- '

dattM Los f Icetbue Back from the Governor:

- u, Q w g 2 a m-

$ 5 O m w

0" \ a m< ag w -

-J

~mpg Z

C l x::

o

• o 1

• i s ., * : .. ' - *

• 2:2.i_d. .  ; '

M *:M' *: *k ' e ? '-,.. * . , , *

"- * . *